IMF cuts economic forecast for Bangladesh, citing political violence

DHAKA, March 10 (Reuters) - The Bangladesh economy will grow
by about 6 percent, less than previously forecast, in the year
to end-June if political violence persists, the International
Monetary Fund said on Tuesday.

More than 120 people have died since protests surged on Jan.
5, the first anniversary of contested national elections.
Transport blockades and strikes, led by the main opposition
party, the Bangladesh Nationalist Party, and aimed at toppling
the government, have disrupted business in the impoverished
South Asian nation of 160 million people.

"The economy may grow around 6 percent in the current fiscal
year of 2014/15 instead of government-targeted growth of 7.3
percent if current political unrest and violence continue," said
IMF mission chief Rodrigo Cubero.

The IMF visit, which began on Feb. 25 and ends on Tuesday,
was to review a three-year Extended Credit Facility, currently
worth about $890 million, which is due to end next month.

Cubero told reporters the unrest was taking its toll on the
economy and warned of more economic damage if the protest
violence persists.

He said lower food prices had eased inflation but with
strong import growth and the unrest disrupting exports,
Bangladesh's current account was expected to swing into deficit.

"Nevertheless, foreign exchange reserves have continued to
increase. Should calm be restored and uncertainty abate, growth
should strengthen to 6.5 percent in the fiscal year of 2015/16,"
Cubero said.